Audit Finds Department of Education Paid Consultants for Services That Many Parents Say Never Took Place
City
Comptroller John C. Liu announced today that an audit of the Department
of Education (DOE) found possible fraudulent billing by consultants
hired to provide services for special needs students.
“There’s
just no excuse for this sloppiness,” Comptroller Liu said. “If the DOE
is paying without checking that services were actually rendered, can
anyone believe they’re checking on the
quality of service? And how many more students could have been served
if money had not been misdirected or misspent?”
Comptroller
Liu’s audit determined that the DOE did not monitor consultants’
invoices for special education services, paying bills for services
reportedly provided in the middle of the night
or for services which parents said their child never received.
The
DOE’s failure to catch these invoices opens the door to fraud and abuse
of taxpayer money. Comptroller Liu referred his audit findings to The
Special Commissioner of Investigation for
the New York City School District.
Weak Protections Against Bad Billing
Consultants
bill the DOE either electronically through the agency’s Vendor Portal
or by submitting paper invoices. The Vendor Portal is supposed to
automatically reject invoices that charge
for services at inappropriate or disallowed hours. However, the Vendor
Portal didn’t always do this. For example, it did not reject billings
submitted for services that were supposedly provided at odd hours (such
as 3:00 a.m.) or on Federal holidays (which
are not allowed).
Even
in cases where the DOE contacted parents to confirm the services and
parents wrote back that their child had been on vacation, out of the
City, or simply had not received services from
a consultant, the DOE still paid the questionable bills.
Possible Bill Padding
In
a sample of five consultants who were identified to have received
unusually large payments, Comptroller Liu’s audit found three that
appeared to have padded their bills.
DOE
staff stated that services should reasonably be provided between 3 p.m.
and 9 p.m. But the three consultants flagged by the audit, who billed
DOE for $34,000 in a one-month period for
after-school sessions, claimed $15,000 in payments for services
rendered after 9 p.m. One consultant regularly submitted bills for 15
or 16 hours of work per day. The consultants charged from $31.49 to
$41.98 per session.
The audit scope was Fiscal Years 2010 and 2011.
The
DOE’s Auditor General acknowledged that the agency needs greater
controls over invoices. Comptroller Liu’s audit commended the agency
for its efforts to enact better controls over billing.
Today’s audit is attached and is available for download here:
http://www.comptroller.nyc.
BACKGROUND:
In addition to today’s audit, two earlier audits by Comptroller Liu’s
office also found that the DOE has weak controls over the consultants it
hires to provide special needs student services.
In January 2012, an audit found the DOE failed to provide special
education services to as many as 72,000 students — more than a quarter
of those children who qualified for physical therapy, speech therapy, or
other assistance. That audit is available here:
A
May 2012 audit found that a DOE consultant, Champion Learning Center,
owed the City nearly $1 million due to questionable bills. That audit is
available here:
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